Al Salam Bank, the newest and largest addition to Sudan’s banking sector, Monday announced it had received central bank approval to absorb all of the $31 million raised through its Initial Public Offering (IPO) to increase its paid-up capital to $100 million from the $75 million initially targeted.

The offering launched on October 9 was an overwhelming success. Demand for the shares from investors in the UAE and GCC in general far outstripped expectations, netting $31 million 65 per cent more than the $18, 250 million the founders had aimed for to top up their $57 million investment. The bank had been expected to return the excess capital raised to investors following the allocation of the shares.

But in a move designed to satisfy investor demand Al Salam Bank’s founders’ council has opted to increase the bank’s capital by extending the shareholder base to include all those who subscribed for the shares. As a result all of the $31 million will be absorbed into the bank’s paid-up capital together with a further $12.75 million contribution from the founders to lift the total to $100 million.

Mohammed Ali Alabbar, a founding council member of the bank, said: “The enthusiastic response to Al Salam’s IPO persuaded us to take this decision which will meet the demand for the shares. It is a very positive step that is beneficial to all those investors who wanted a stake in the bank and to Al Salam itself. The bank will be bigger, stronger and able to make an even greater contribution to the development of Sudan’s banking sector.”

Hussein Al Meeza, fellow founder member of Al Salam Bank, added: “The council has recognised the need to increase the bank’s capital in response to the success of the IPO. We have received approval from the Central Bank of Sudan and the Khartoum financial market to increase the total to $100 million. This has cleared the way for launching Al Salam as a Shariah-compliant institution capable of offering a full range of Islamic finance products to customers in Sudan.”

A date for the launch of the bank’s operations is expected shortly and the process of setting up its headquarters offices in Khartoum is underway.

Al Salam’s founders council has five members: Mr. Mohamed Ali Alabbar, Mr. Hussein Mohammed Al Meeza, Mr. Saleh Saeed Lootah, Mr. Salem Rashid Al Muhanadi, and Mr. Mohammad bin Omair bin Yousif. The list of founders includes businessmen and financial institutions in Sudan, UAE, Saudi Arabia, Lebanon, Jordan, and Bahrain such as the Investment Office, Amlak Finance, Lebanese Canadian Bank, State of Khartoum, and The National Fund for Social Security. Once Al Salam Bank is established it will have the largest capital of any bank operating in Sudan.